FAR (ASX) Ann: Quarterly Activities and Cashflow

Originally posted by PhillW: ↑

My worry is the third party agreement and the capital raising at 4.25c. Below is a post from a HC member (Thebuzzz) when FAR announced the finance. He/she warned us all that seeking finance from Glencore was not in the best interest of the company and it was evidence that FAR was struggling to attract financers and was a desperation move. Copy of post at the very bottom of this post along with the link.

Now we have our RANK amateur management having failed to secure finance apparently did not have anything written into this third party agreement with Glencore that terminated the agreement if finance was to fall through. I assume the agreement is in relation to the below headline;

Jan 22 (Reuters) - FAR Ltd (FAR) said on Wednesday it signed a binding agreement with Glencore Plc GLEN.L to market the Australian company's share of crude oil from the $4.2 billion Sangomar project in Senegal.
The Africa-focused oil explorer will let Glencore market a minimum of 20 million barrels of oil for seven years.

Add to that the fact that FAR paid over US $2M in break fees when finance fell through tells me that the third US $100M finance package that fell over triggered the US $2M break fee probably paid to the two $100M financers that offered the term sheets. The capital raising was initially subject to FAR receiving term sheets for US $350M. I see nowhere where these terms were amended to US $300M.

https://hotcopper.com.au/posts/42470096/single

If pre-placement market soundings were finished there would be no need to (a) have this condition, and (b) disclose it to the market.

'pre-placement market soundings" are done in anticipation of selling down the asset you have just under-written to ensure that there is demand for the asset before you are fully 100% committed. It would seem that at least one of, if not both of BNP and Macquarie intend to sell-down at least part, if not all of their $100m, most likely into the US high yield market.

Given Far couldn't find a third underwriting bank and have relied on Glencore (knowing what their motivations would be) gives you some idea of (a) the difficulty they had getting underwriting, (b) other banks view of their own ability to place the asset once underwritten, and (c) Far''s desperation.

Energyraters, what I wrote was a rhetorical question not a statement. In any event, Glencore is not a bank or a financier; it is an owner/operator/trader of commodity business. How else would the loan fit into their business strategy other than if it was a potential avenue to ownership? Another rhetorical question.

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Fact is Phill if Glencore stick to their guns FAR collapse and they get nothing.
It really does show how the extra 40% screwed us royally IMO.